Turns out the pumping business is a very good place to be in this economy.
On July 29 Flowserve (FLS) announced second quarter earnings of a better than expected $1.92 a share and raised its earnings forecast for 2009. The company increased its target for 2009 earnings to $7.15 to $7.75 a share from an earlier target of $6.75 to $7.50.
Sales climbed to $1.09 billion. That was an increase of 6% from the first quarter of 2009 but a decrease of 6% from the second quarter of 2008.
Taking out the effect of a stronger U.S. dollar, on a constant currency basis sales climbed 4% year-over-year.
Bookings, a key measure of future sales trends, climbed by 7% from the first quarter of 2009.
The company still has a way to go, though, to recover all the ground it has lost in the global slowdown: bookings decreased by 21% (13% on a constant currency basis) from the second quarter of 2008. The company’s order backlog was a little over $2.7 billion at the end of the quarter. The book-to-bill ratio, which compares the value of new orders to the value of orders shipped, came in at 0.95.
Investors can see some very promising growth ahead—in 2010 I’d estimate—in preliminary orders from solar thermal power operators (which concentrate sunlight on a central tower to generate electricity) of $31.5 million for boiler feed water, condensate, cooling water and molten salt pumps. And in $45 million in orders for valves to be used in two nuclear power plants now under construction in the United States.
(Full disclosure: I own shares of Flowserve in my personal portfolio.)